Shohola man pleads guilty to $2.7M fraud

A Pike County man pleaded guilty Monday to defrauding the New York City Department of Education out of about $2.7 million and to bribing a department employee to carry out the scheme, according to federal officials.

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By BETH BRELJE

poconorecord.com

By BETH BRELJE

Posted Dec. 19, 2012 at 12:01 AM

By BETH BRELJE

Posted Dec. 19, 2012 at 12:01 AM

» Social News

A Pike County man pleaded guilty Monday to defrauding the New York City Department of Education out of about $2.7 million and to bribing a department employee to carry out the scheme, according to federal officials.

Nelson Ruiz, 35, of Shohola, pleaded guilty in Manhattan federal court before U.S. District Judge John Koeltl.

"In stealing scarce and precious education resources intended for children with special needs, Nelson Ruiz did an extreme disservice to both the (Department of Education) and the children who really do need extra help," said Preet Bharara, U.S. Attorney for the Southern District of New York.

According to the complaint, the plea agreement, and statements made in court:

From 2008 through June 2012, Ruiz used six companies that he controlled, the Ruiz Companies, to bill the Department of Education about $2.7 million for sign language interpretation services.

According to department billing forms that Ruiz submitted, the sign language interpretation services were provided in that time to 11 New York City public schoolchildren — all of whom had varying special needs, including cognitive, developmental, academic and language delays — at their schools.

None of the sign language interpretation services for which the department paid the Ruiz Companies were ever provided to any of the students, authorities said.

In fact, none of the students actually needed the services that the Ruiz Companies claimed to have provided.

For example, during the 2010-11 and 2011-12 academic years, at least three of the 11 students were not even enrolled in a department school.

In addition, from July 2010 through May 2012, Ruiz falsely certified on 75 department billing forms that he had provided about $200,000 worth of sign language interpreting services to one of the 11 students, even though that student never received any such services during that period and had not been a New York City public school student since 2009, officials said.

Ruiz used students' personal information, submitted fraudulent applications and billing forms, forged the signatures of at least two students' parents and seven department officials — one of whom had died prior to the date of her forged signature, and another who had retired six years prior to the date of her forged signature.

As part of this scheme, Ruiz also paid hundreds of dollars each month to an employee of the department to whom he submitted the fraudulent billing forms for the 11 students.

Ruiz paid these bribes in exchange for the employee's assistance in, among other things, expediting the processing of and payment to Ruiz for the fraudulent sign language interpretation bills.

Ruiz pleaded guilty to one count of mail fraud and one count of bribery concerning programs receiving federal funds.

He faces a maximum term of 20 years in prison on the fraud count and a maximum term of 10 years in prison on the bribery count.